Effects of High-Involvement Work Systems on Employee Satisfaction and Service Costs in Veterans Healthcare

Abstract

Two strong imperatives for healthcare managers are reducing costs of service and attracting and retaining highly dedicated and competent patient care and support employees. Is there a trade-off or are there organizational practices that can further both objectives at the same time? High-involvement work systems (HIWS) represent a holistic work design that includes interrelated core features such as involvement, empowerment, development, trust, openness, teamwork, and performance-based rewards. HIWS have been linked to higher productivity, quality, employee and customer satisfaction, and market and financial performance in Fortune 1000 firms. Apparently, few prior studies have looked at the impacts of this holistic design within the healthcare sector. This research found that HIWS were associated with both greater employee satisfaction and lower patient service costs in 146 Veterans Health Administration centers, indicating that such practices pay off in both humanistic and financial terms. This suggests that managers implementing HIWS will incur real expenses that are likely to be more than offset by more satisfied employees, less organizational turmoil, and lower service delivery costs, which, in this study, amounted to over $1.2 million in savings for an average VHA facility.